United States District Court, E.D. Pennsylvania
TASHICA FULTON-GREEN and DANIEL CREVAK, on behalf of themselves and all others similarly situated, Plaintiffs
ACCOLADE, INC., Defendant
E.K. PRATTER, UNITED STATES DISTRICT JUDGE.
case stems from a data breach that resulted when an Accolade
employee released all of the W-2s for its U.S.-based
employees to a cybercriminal. After negotiations and
mediation, the parties entered into a settlement agreement,
filed a motion for final approval, and Class Counsel filed an
unopposed motion for attorneys' fees. Because the
settlement is fair, reasonable, and adequate, the Court
grants the parties' motion for final approval. Because
the proposed attorneys' fees are reasonable, the Court
grants Class Counsel's motion for attorneys' fees.
January 2017, Accolade, Inc. was the target of a
"phishing" scheme." A cybercriminal requested
the W-2s for current and former U.S.-based Accolade employees
from an Accolade employee who then sent the unencrypted files
via email. The W-2s included personally identifying
information (PII) such as employees' names, addresses,
Social Security Numbers, salaries, and taxes withheld for
2016. Tashica Fulton-Green's and Daniel Crevak's PII
was included in the breach. They filed suit against Accolade
on behalf of themselves and all others similarly situated
alleging negligence, negligence per se, breach of implied
contract, and breach of fiduciary duty.
parties entered into a settlement agreement following
negotiations and a private mediation overseen by Rodney A.
Max of Upchurch Watson White & Max. The parties agreed to
settle this action, pursuant to the terms of their settlement
agreement, and subject to the approval and determination of
the Court as to the fairness, reasonableness, and adequacy of
the settlement. Final approval of the settlement will result
in dismissal of this action with prejudice. Per the terms of
the preliminary settlement approval, the parties filed a
motion for final approval and Class Counsel filed an
unopposed motion for attorneys' fees.
notice deadline regarding this class settlement was 30 days
after preliminary approval, which was docketed on January 24,
2019. The claims deadline is February 17, 2020; however, the
opt-out/objection deadline was May 23, 2018. No. one filed an
opt-out or objection despite the fact that the notice program
reached 98.8% of class members.
settlement class consists of:
All current and former Accolade employees whose W-2 data was
compromised as a result of the Data Disclosure which occurred
on or about January 17, 2017.
the settlement, all class members are entitled to enroll in
identity theft protection for 24 months through
Experian's ProtectMyID service. Class members who have
already enrolled in the program will be instructed on how to
enroll for an additional 24 months. Class members are also
entitled to seek reimbursement for four claim categories
(A-D), with an overall cap of $1, 500 paid to each class
member. However, participants must have spent at least one
full hour dealing with the theft of their PII before they can
claim any lost time. The treatment of each claim category is
set out as follows:
members who had a false tax return filed after January 16,
2017 are eligible for a basic payment of $75. They must
provide proof of the false tax return, attest that they have
no knowledge of a false return being filed in the previous
three years, submit a self-verifying statement for time spent
dealing with the effects of the breach, and submit
documentation of recovery. Accolade will reimburse claimants
at $25 per hour spent dealing with the effects of a false tax
return. There is a maximum recovery of $275 per claimant for
claims made pursuant to Claim Category A.
members who had an Internal Revenue Service (IRS) tax
transcript requested using their PII after January 16, 2017
and submitted an identity theft affidavit to the IRS are
eligible for payment of $75. They must provide proof of the
issuance of a tax transcript by the IRS and submission of an
identity theft affidavit, attest that they have no knowledge
of an IRS transcript being fraudulently requested using their
PII in the previous three years, and submit a self-verifying
statement for time spent dealing with the effects of the
breach. Accolade will reimburse Category B claimants at $25
per hour spent dealing with the effects of having their IRS
tax transcript requested using their PII. There is a maximum
per claimant recovery of $125 for claims made pursuant to
Claim Category B.
members who experienced incidents of identity theft or
financial fraud (other than those covered by Categories A and
B) after January 16, 2017 are eligible for payment of $75.
This includes the opening of new bank accounts, credit
applications, FAFSA applications, etc. It does not include
fraud on existing credit cards. These Category C class
members must provide proof of fraudulent activity or details
of such activity and why proof does not exist, attest that
they have no knowledge of identity theft (other than
fraudulent credit card activity) filed in the previous three
years, and submit a self-verifying statement for time spent
dealing with the effects of the breach. Accolade will
reimburse claimants at $25 per hour spent dealing with the
effects of identity theft. There is a maximum per claimant
recovery of $275 for claims made pursuant to Claim Category
members who claim they suffered out of pocket expenses (other
than those covered in categories A, B, or C) as a result of
the data disclosure are entitled to reimbursement of such
amount. They must submit reasonable documentation supporting
their claim for expenses, proof of fraudulent activity or
details of such activity or why proof does not exist, include
a detailed explanation of the activities related to the data
disclosure that the claimant spent time on, and submit a
self-verifying statement for time spent dealing with the
effects of the breach. Accolade will reimburse claimants at
$25 per hour spent for up to 3 hours for claims made pursuant
to Claim Category D. Claimants are not entitled to
reimbursement of expenses that have already been reimbursed
through Experian or any other source.
settlement agreement also provides for injunctive relief
which includes undertaking and maintaining the following
cybersecurity measures for two years: cybersecurity awareness
and training program, training employees on new policies for
handling PII, implementing and operating systems to help
detect and filter phishing attempts, restricting access to
tax and payroll information, random testing of policies, and
access control review.
preliminary settlement approval appointed Epiq to administer
the claims in the order they are received. To make a claim, a
Settlement Class Member must submit a valid, timely, and
sworn Claim Form by the deadline of February 17, 2020. Class
members have 30 days from the date of a written notice to
cure any deficiencies in their claim forms.
Class Member Response
the Court granted preliminary approval in January 2019, the
Settlement Administrator mailed 937 Notices via First Class
Mail to all Settlement Class Members. According to the
parties, the Notice Program reached 98.8% (or 925 out of 937)
of the Settlement Class. The parties also set up a neutral
website, which includes the Complaint, Long Form Notice,
Settlement Agreement, Order Granting Preliminary Approval,
paper Claim Form, and a frequently asked questions page. An
automated phone number that is available 24/7 has fielded 63
calls representing 491 minutes of use and live agents have
also handled 33 inbound calls representing 428 minutes of use
and 28 outbound calls representing 62 minutes of use.
parties contend that the class member response has been
positive. The deadline to request exclusion forms was May 23,
2019 and no one has requested to be excluded or filed an
objection. CAFA notice was provided to the United States and
applicable state Attorneys General, none of whom have raised
concerns. Sixteen claims have been submitted thus far, and
Class Counsel expect up to 28 claims in total.
Court held a preliminary approval hearing on January 9, 2019
and granted preliminary approval on January 24. In accordance
with the deadlines set out in this Court's preliminary
approval order, the parties moved for final approval and
filed a motion for attorneys' fees on June 24. The Court
subsequently held a final approval hearing on July 24. For
the reasons outlined in this Memorandum, the Court grants
final approval of the class settlement and awards
attorneys' fees of $300, 000, $5, 000 for reimbursement
of reasonable costs and expenses, and $1, 000 service awards
for both of the class representatives.
Motion for Final Approval
as here, the Court has not already certified a class prior to
evaluating a settlement, the Court initially must determine
whether the proposed settlement classes satisfy the
requirements of Federal Rule of Civil Procedure 23(a) and
(b). See Amchem Prods., Inc. v. Windsor, 521 U.S.
591, 619 (1997); see also In re Pet Food Prods. Liab.
Litig., 629 F.3d 333, 341 (3d Cir. 2010) ("[A]
district court first must determine that the requirements for
class certification under Rule 23(a) and (b) are met.").
The Third Circuit Court of Appeals summarized the demands of
Rule 23 as follows:
Rule 23(a) contains four threshold requirements, which every
putative class must satisfy:
(1) the class is so numerous that joinder of all members is
impracticable; (2) there are questions of law or fact common
to the class; (3) the claims or defenses of the
representative parties are typical of the claims or defenses
of the class; and (4) the representative parties will fairly
and adequately protect the interests of the class.
Fed. R. Civ. P. 23(a); see also Amchem, 521 U.S. at
613. Upon finding each of these prerequisites satisfied, a
district court must then determine that the proposed class
fits within one of the categories of class actions enumerated
in Rule 23(b). ..
[Certification pursuant to Rule 23(b)(3) seeking monetary
compensation is permitted where (1) "questions of law or
fact common to class members predominate over any questions
affecting only individual members, " and (2) "a
class action is superior to other available methods for
fairly and efficiently adjudicating the controversy."
Fed.R.Civ.P. 23(b)(3); see Collins v. E.I. DuPont de
Nemours & Co., 34 F.3d 172, 180 (3d Cir. 1994).
These twin requirements are commonly referred to as
predominance and superiority.
Sullivan v. DB Invs., Inc., 667 F.3d 273, 296 (3d
Cir. 2011) (en banc).
'"[f]actual determinations necessary to make Rule 23
findings must be made by a preponderance of the evidence. In
other words, to certify a class the district court must find
that the evidence more likely than not establishes each fact
necessary to meet the requirements of Rule 23."'
In re Ins. Brokerage Antitrust Litig,, 579 F.3d 241,
257-58 (3d Cir. 2009) (quoting In re Hydrogen Peroxide
Antitrust Litig., 552 F.3d 305, 320 (3d Cir. 2008)).
Federal Rule of Civil Procedure 23(a), the first factor to
consider in certifying a class is whether "the class is
so numerous that joinder of all members is
impracticable." The plaintiffs "need not precisely
enumerate the potential size of the proposed class, nor [are]
plaintiff[s] required to demonstrate that joinder would be
impossible." Cannon v. Cherry Hill Toyota,
Inc., 184 F.R.D. 540, 543 (D.N.J. 1999) (citation
omitted); see also 7A Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure
§ 1762 (3d ed. 2005) ("'[I]mpracticable'
does not mean 'impossible.' The representatives only
need to show that it is extremely difficult or inconvenient
to join all the members of the class."); 1 A. Conte
& H. Newberg, Class Actions § 3:14 (5 th
ed. 2011) ("Plaintiffs bear the burden of demonstrating
that joinder is impracticable, but impracticable
does not mean impossible.'").
"[G]enerally if the named plaintiff demonstrates that
the potential number of plaintiffs exceeds 40, the first
prong of Rule 23(a) has been met." Stewart v.
Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001) (citation
omitted). Because there are hundreds of class members, this
factor is easily met.
Federal Rule of Civil Procedure 23(a), the second factor to
consider in certifying a class is whether "there are
questions of law or fact common to the class." The
commonality prerequisite does not require that all members of
the prospective class share identical claims. Hassine v.
Jeffes,846 F.2d 169, 176-77 (3d Cir. 1988) (relying on
Eisenberg v. Gagnon,766 F.2d 770, 786 (3d Cir.
1985)). Rather, "[t]he commonality requirement will be
satisfied if the named plaintiffs share at least one question
of fact or law with the grievances of the prospective
class." Baby Neal v. Casey,43 F.3d 48, 56 (3d
Cir. 1994). As the Supreme Court explained: '"What
matters to class certification ... is not the raising of
common "questions"-even in droves-but, rather the
capacity of a classwide proceeding to generate common
answers apt to drive the resolution of the
litigation. Dissimilarities within the proposed class are
what have the potential to impede the generation of common
answers.'" Wal-Mart Stores, Inc. v. Dukes,131 S.Ct. 2541, 2551 (2011) (quoting Richard A. Nagareda,
Class Certification in the Age of Aggregate Proof,
84 N.Y.U. L. Rev. 97, 132 (2009)) (emphasis in original).
Here, there ...